Workday Stock Drop Looks Sharp, But How Deep Can It Go?
Workday (WDAY) stock is down 11.2% in 21 trading days. The recent slide reflects renewed concerns around Workday’s declining revenue growth and struggles with GAAP profitability, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Workday stands today.
- Size: Workday is a $57 Bil company with $9.0 Bil in revenue currently trading at $213.06.
- Fundamentals: Last 12 month revenue growth of 13.9% and operating margin of 8.7%.
- Liquidity: Has Debt to Equity ratio of 0.06 and Cash to Assets ratio of 0.46
- Valuation: Workday stock is currently trading at P/E multiple of 109.8 and P/EBIT multiple of 73.7
- Has returned (median) 38.7% within a year following sharp dips since 2010. See WDAY Dip Buy Analysis.
These metrics point to a Strong operational performance, alongside High valuation – making the stock Fairly Priced. For details, see Buy or Sell WDAY Stock
That brings us to the key consideration for investors worried about this fall: how resilient is WDAY stock if markets turn south? This is where our downturn resilience framework comes in. Suppose WDAY stock falls another 20-30% to $149 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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2022 Inflation Shock
- WDAY stock fell 55.9% from a high of $300.90 on 17 November 2021 to $132.63 on 4 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 9 February 2024
- Since then, the stock increased to a high of $307.21 on 26 February 2024 , and currently trades at $213.06
| WDAY | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -55.9% | -25.4% |
| Time to Full Recovery | 462 days | 464 days |
2020 Covid Pandemic
- WDAY stock fell 42.9% from a high of $199.38 on 18 February 2020 to $113.87 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 26 August 2020
| WDAY | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -42.9% | -33.9% |
| Time to Full Recovery | 161 days | 148 days |
2018 Correction
- WDAY stock fell 32.1% from a high of $224.30 on 11 July 2019 to $152.29 on 23 October 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 28 August 2020
| WDAY | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -32.1% | -19.8% |
| Time to Full Recovery | 310 days | 120 days |
Feeling jittery about WDAY stock? Consider portfolio approach.
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